The key element of most MMOs is grind(the quest grinding included) to reach the level cap or maximize skill/stat points by combat.
Why does it feel wrong? Linear rewards for exponential effort.
Grinding for the 300th level means very little if rewards are insignificant.

Why MMOs expect it? to make it seems like a slower-paced game with endgame reached only by dedicated players.(to stretch content into slower-paced chunks).
Levels are essentially a reward mechanism, not content segmentation model(so using level segregation creates inherently limited opportunities to use content more than once, e.g. area X is suited for level 66-69 and not anything above/below - its therefore wasted for everyone else).
A. Planning from the perspective of the endgame-reaching user first.

B. Making all grind feel rewarding without exponential investment.
Lower level cap and less expected time-to-level (see http://videogamedesign.wikidot.com/stats:accelerated-flat-interval ).

C.Reducing importance of levels from formulas and skills, such as that attacking monsters 15 levels above/below is perfectly normal(see http://videogamedesign.wikidot.com/stats:level-ratio ).